Nestle USA

800 NORTti BRANO BlVD

au NOAl E, CA 91~
Tfl (fll615.9-6000

Ju ly 14, 201 1

Donald Clark, Secretary

Federal Trade Commission
Office of the Secretary
Room H-1 13 (Annex W)
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580

Re : Interagency Working Group on Food Marketed to Children - FTC Project No. P0945 13.
Comments on Proposed Nutrition Prin ciples

To Whom It May Concern:

Attached you will find Nestle USA's Comments to the Preliminary Proposed Nutrilion
Principles to Guide Industry Self Regulation of the Interagency Working Group on Food
Marketed to Children (IWG Proposal). Pages 2-5 deal specifically with the Nutrition Principles.

Nestle. Good Food , Good Life

Nestle USA
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July 14,20 11

Donald Clark, Secretary

Federal Trade Commission
Office of the Sec retary
Room H-11 3 (Annex W)
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580

Re: Interagency Working Group on Food Marketed to Ch ildren - FTC Project No . P09451 3.
Comments on Proposed Nutrition Principles and Marketing De finitio ns

To Whom It May Concern :

These Comments are submitted by Nestle USA, Inc ., Nestl e Prepared Foods Company, and Dreyer' s
Grand Ice Cream , Inc. Gointly referred to as Nestle USA) in response to the Preliminary Proposed
Nutrition Principles to Guide Industry Self Regulation of the Interagency Working Group on Food
Marketed to Children (lWG Proposal).

By way of background, Nestle USA markets such food and beverage brands as Nest le® Toll
Ho use®, Nestle® Nesquik®, Nestlc® Coffee-Mate®, Stouffer's®, Lean Cuisine® , Nescafe®,
Nestl e® Juicy Juice®, Buito ni®, Dreyer's® and Edy's®, Nestle® Crunch®, Wonka®, and
DiGiorno®.

Nestle USA is committed to responsible communication to consumers, including children. We

implemented o ur globa l parent company's policy on marketing to children and are members of the
Belter Business Bureau's Children's Food and Beverage Adverti sing Initiati ve (CFBAI). As a
CFBAJ member we ha ve made our nutriti onal standards for healthie r dietary choices public, and we
adverti se a limited number of products to children. We are com mitted to the ongoing nutritional
improvement of o ur products, which includes the reduction of trans fat s, sodium , and sugars, as well
as incorporating healthful ingredients such as whole grains and vegetables . Nestle USA is a member
of the Healthy Weight Commitment Foundation, which is working to remove 1.5 trillio n calories
from the food supply by 20 15.

Nestle USA has reviewed the IWG Proposa l and while we appreciate the IWG's goal of address ing
the high rates of childhood obes ity in America, we do not agree with the proposed principles o utlined
in the tWG Proposal for several reasons. Primary among those reasons are that the nutritio n
principles are inconsistent with othe r federa l food and nutrition standards, are unnecessarily
complicated, and take a narrow view of healthfu l eating; the marketing principles are over reaching,
unreasonable, and un workable; and the [WG has not provided any evidence that its proposed

Nestle. Good Food. Good Life

restrictions on marketing will impact youth obesity rates. Notwithstandi ng these serious
shortcomings, the IWG ' s "volu ntary guidelines" would impose a great burden on the foo d and other
industries (such as medi a and entertainment) with no regard for the guidelines actual impli cati ons.

We appreciate that the IWG stri ved to create an open process; neve rthe less the critica l eva luati on
requi red of fed eral agencies in developing polic ies, like noti ce-and-comment rulemaking, is absent.
A lthough the ultimate work product is suppose to be a report to Congress, what the lWG created was
a program that fundam entall y reshapes the adverti sing practices of the food industry, and it has done
thi s with very little ev idence to support that the program will have the des ired impact. H.R. 1105
called for a Working Group to "conduct a study and devel op recomme ndati ons," and to identify
"ev idence concerning the role of nutrients, ingredients, and foods in preventing or promoting the
devel opment of obesity." The IWG Proposal and reque st for comm ent does not sati sfy thi s charge
from Congress.

As a member of the CFBAI and the Grocery Manufacturers Assoc iatio n ("GMA"), Nestle USA
supports the Comments fil ed by both these organizations and in the sections below elaborates on a
few key areas ofthe IWG Proposal that are particularl y probl ematic.

I. Proposed Nutriti on Principles

T he IWG' s Proposed Nutrition Principl es pl ace undue emphasis on restri cting ce rtain foods and
nutrients rather than focusing on the components of a hea lthful diet. In doing so, the IWG has
di sregarded establi shed nutrition principles. It has al so employed a one-size-fits-all approach to
different types of foods and to the youth who consume those foods. ]n an effort to get what it
considers the "right" foods in front of children and teens, the IWG treats all youth the same, whether
they are 2 years old or 17 years o ld . The IWG also fail s to look at the ro le pos itive nutri ents play in
the diet and there is no menti on of calories, a key factor in obesity. Its focus on added sugars and
Reference Amount Customarily Consumed (RA CC) is unnecessarily complicated, confusing, and ill­
defin ed. The IW G Proposa l creates contrad ictory federal po li cies, notwith standing the Di etary
Guidel ine s for Americans that strive to foster hannony in nutrition health policy. Finally, unreal istic
goals, like calling for therapeutic sodium leve ls, removes important incenti ves fo r enhanci ng the
nutritional propert ies of foods. There is no incentive to strive toward a goal that is unobtai nable.

Single Standard vs. Food Category Approach

By utili zing an across the board, one-size-fits-al1 set of criteria , the IWG Proposal in effect says that
to be acceptable each food must duplicate the recom mended pattern s and proportion of nutrients in
the total diet; that each foo d must be an ideal food. Thi s approach ignores the vari ety o f the actual
food supply, the way people eat, and long stand ing dietary advice such as "all foods can fit within a
health ful eating style.,,]1 1 Alternati vely, a food category approac h to nutrition profilin g conside rs
both the role of a food in the diet and its intrinsic nutritional properties. By allowing criteria to be
appropri ately tail ored to renect the inherent nature of a particul ar food category, a food category

111 ADA Pos ition Paper on Total Diet Approach to Communicating Food And Nutrition Infonnalion. Journal of the
American Dietet ic Association 102: 100- 108

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approach therefore also allows for the setting of meaningful and reali stic nutrient targets.

If an IWG objective is to drive the development of healthier products, realistic nutritional criteria
must be set l21 . In setting effective yet atta inab le nutritional targets, it is necessary to take into account
a food' s intrin sic nutriti ona l profile, which is onl y feasible within a food category approach. Havi ng
spec ifi c and rea li stic targets per food category is a better incentive to develop or reform ulate food
products with a healthier profil e than the IWG's one-size- fits-a ll proposa l. We recogn ize the IWG
believes it has identified the food categories most heavily advertised to children; however, given that
the types of products that are adverti sed to child ren change with time (a nd indeed have changed since
the re port cited by the IWG), appropriate nutrition criteria shou ld instead apply to all fo ods and
beverages, excluding log ical exemptions (e .g., water).

Target Population

Just as one set of nutrie nt criteria does not fit all food categories, one set o f nutrient crite ri a does not
fit all age groups. While the Dietary Guidelines for Americans apply to children and adults 2 years of
age and older, it is important to note that these are general guidelines and not precise nutrient
recommendations. Even more importantly, the 20 10 Dietary Guidelines provide further detailed
recommendations by age group, sex, and acti vity le ve ls.

The IWG nutritional criteria for all children 2-17 ignores the unique nutritional needs and
recommended smaller serving sizes for children under 4 years of age. As evidenced by the FDA's
Nutrition Facts templates for children under 4 and under 2, as well as the special RACC serving sizes
for c hildren under 4, the nutriti onal needs of young children should be handled separately. Young
children have vastly different caloric needs (1 ,000 per day versus 2,000 calories for olde r children,
typ ically). Consequently, these children have different food group needs and they also consume
smaller serving sizes, but at frequent eating occasions.

Additionally, the IWG's nutrition principles do not allow fl ex ibility for, or have not considered, other
sub-populations that may need spec ial conside ration, specifically teen athletes and very active
c hildren as well as children with issues of underwe ight or failure to thri ve.

Transparencv

Although the criteria in the IWG Proposa l are intended to operate primarily in the background as
gu idance to manufacturers deve loping products and , arguab ly, for media compan ies who will be
placing food product ads and validating the " nutrition" of these products, the criteria in the IWG
Proposa l will be public. Therefore, Nest le USA believes that a ny set of nutrient criteria need to be as
tran spare nt and user friendl y as possible. Spec ifical ly:

121 Tetens I, Oberdorfer R, Madsen C, de VJ. Nutrit ional characterisation of foods: science-based approach to
nutrie nt profiling. Summary report of an ILS I Europe works hop he ld in Apri l 2006. Eur J Nutr 46 Supp] 2:4- 14.
2007

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A set o f nutrient criteria sho uld use the Labeled Serving Size (LSS) rather (han the Reference
Amount Customarily Consumed (RACe). A compliance criterion should be readily available to all
and capable of understanding by many. RACC is a regulatory term and concept that is less familiar to
the public. While many products may be labeled on a RACC basis, there are many products that have
serving sizes that differ from the RACC (i.e., single serve containers). The LSS is already a required
element in the Nutrition Facts Panel, is infonnation consumers can read ily see, more accurately
reflects what is actually consumed, and therefore increases transparency.

A system of nutrient criteria should use total sugars rather than added sugars. All sugars, regardless
o f whether added or naturally occurring, are metabolized in the same manner and are not
nutriti onally different. The Nutrition Facts Panel di splays tota l sugars, not added sugars, and
therefore , it is extremely difficult, if not impossible, to confinn the amount of added sugar without
proprietary formula infonnation. We believe that a criterion for total sugars better aids transparency.

Policy Difference / Regulatory Deviations

There are a number of instances in the IWG Proposal in which a positio n differs from guidance or
po licy with other offices of the government or which dev iate, intentionally or otherwise, from
existing regulations. These differences and deviations will cause confusion to consumers and
manufacturers, alike. The following are some examples:

• The IWG sets one sod ium limit for both main dishes and meals, thu s ignoring the larger
contribution to tota l daily intake of meal s. FDA regulations set different sod ium disclosure limits
for meals versus main dishes, and we believe thi s approach should be used in deve loping a set of
nutrient criteria for meal s and main di shes that are advertised to children.
• The IWG 's Option 2 on food groups and how much must be included in a main di sh or meal is
confusing. The IWG appears to require contributions from at least two different food groups for
main di shes and at least three different food groups for meals. Not only is thi s inconsistent with
the regulatory definition regarding the number of different food groups that mu st be included in a
main dish and meal (both require foods come from two different food groups), but the portion
sizes also differ in the IWG definition s (differ depending on food group) versus regulati ons (40
g).

• The Saturated Fat criteria set forth under the IWG ' s Principl e B is inconsistent with 21 CFR
101.62(c)(i) in that there is no additional small RACe (30 g or less) requirement for a " Low
Saturated Fat" claim.

Nutrient Components to Encourage (Food Groups and/or Nutrients)

While the IWG Proposal outlines minimum food group contributi ons, we bel ieve all nutrients for
which the FDA has set a Daily Value (DV) also playa role in clos ing nutritional gaps. It IS
reasonable that a nutrient requirement may be met through fortificat ion, preferabl y with a nutrient

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that is either a "shortfall nutrient" as defined in the 2010 Dietary Guidelines for Americans (i.e.,
dietary fiber, potass ium, ca lcium, and vitamin D) or is a nutrient required to be li sted on the N utrit ion
Facts panel.

The FDA has defined what constitutes a meaningful contribution to the diet by establi shing minimum
nutrient content requirements for "good source" claims (i.e., 10% of the Daily Va lue). In cases where
a minimum food group requirement can't be met (e.g., a small se rving size), prov iding at least a
"good source" of an essent ial nutrient can pos iti ve ly impact one's daily nutrient needs.

Ca lories

The 2010 Dietary Guide lines define two "overarching concepts." One of these two concepts focu ses
solely on calories . Spec ifically, the concept states, "Ma intain ca lorie balance over time to achieve
and sustain a hea lthy weight." One of the ways the 20 10 Di etary Gu idelines propose Ameri cans meet
thi s goal is to monitor food intake and specifically states, "The Nutriti on Facts label found on fo od
packaging prov ides ca lorie information for each serv ing o f food or beverage and can assist
consumers in monitoring their intake." By omitti ng calori es from the crite ri a, the IWG di scounts the
importance calories play in maintaining and/or achieving a healthy weight. Eating excess amounts of
any type of food , even if hea lthy, will cause overweight or obes ity.

Water Exemption

A strict app licat ion of the IWG's Principle A would not allow wate r to be advertised to children since
it does not make a food group contri bution. This may be an unintended consequence o f the criteria in
the Proposa l. One of the key consumer messages in the 20 I 0 Dietary Gu ideli nes is, "Drink water
instead of sugary drinks." We believe bottled water should be exempt from the requirement to make
a food group contribution.

Sod ium

Given that adu lts and children 4 years and older share the same FDA Nutrition Facts panel , all
sodium-spec ific recommendations can be based on a dai ly intake of 2,300 mg, the 2010 Dietary
Guidelines upper limit for older chi ldren. IWG appears to have already adopted a similar rationale by
basing dail y foo d group consumption recommendations on 2,000 ca lories, the defau lt Daily Val ue for
a product labeled for adults and chi ldren over 4 years old . This rationale can also be applied to
sodium.

Unfortunately and contrary to what the IWG expected, the nutrition princ iples do not fo ster furth er
advances by food companies in developing and promoting nutritionally improved, healthful food
options for chi ldren and adolescents. T he 20 I0 Dietary Gu idelines for Americans focused on obesity
based on the latest nutrition research, yet the IWG proposa l is not consistent with the Gu idel ines .
Nestle has and continues to devote substantial product deve lopment resources toward findin g a
balance between palatable, enjoyable foods that are also consistent with hea lthful eating habits.
From our experience, we can say that the timeframes and nutritional profi les contemplated by the
IWG are not reali stic.

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 II. Proposed Marketing Definiti ons

The IWG states its marketing definition s, taken from the FTC 2006 (and 2008) study of youth­
directed food marketing expe nditures and act ivities, have been vetted, tested, and are the right ones
for defining "marketing to children and adolescents." We di sagree. The 20 catego ries of marketing
set forth in the study were created by the FTC for purposes of data collection. Superimpos ing audi t
report criteria as the basis for ident ifying marketing directed specifically to children and adole scents
is not workable. We respectfully di sagree with the statement that the FTC template for co ll ecti ng
expenditures "has already been vetted through public com ment in conn ection with the 2006 FTC
Study ." The Ordcr criteria was fa shioned as a gross measure of expend itures and wasn' t designed to
scrve as a go ing forward mode l of establi shing what is and is not marketing to youth for the purpose
of advert ising and other consumer communications.

The definitions are too broad and poorly defined for use in restnctmg advertising. Use of the
definiti ons wou ld mi scl ass ify large amounts of marketing activity as directed to children or
adolescents. Industry constituents did not agree with these definitions in the 2006 study and remain
opposed to the definiti ons and rationale as set forth in the IWG proposal. The shortcomings are rea l,
as is evidenced by the fact the FTC staff had to issue numerous clarificatio ns and regularly consult on
the scope and reach of the definitions. If the FTC's definition s are accepted, marketers and lawyers
will spend countless hours deciphering their meaning and reach, even when the intent of any given
communication is not to market to children.

What foll ows are a few areas and definition s that pose serious concerns to Nestle USA. Central to all
of the points rai sed below is what it means to " market to ch ildren or adolescents." The IWG's
defin itions of marketing to yo uth take away a co mpany's ability to make its products known , and
certainly not just to children or adolescents. The definiti ons also negative ly impact the positi ve
soc ial and philanthropic efforts of companies.

Advertising and Adolescents

Nestle USA believes that standards for marketing to children under 12 are appropriate and, as a
CFBAI part ic ipant, abides by standards that reasonably define marketi ng to ch ildren. We do not
believe that extending marketing limi tations to adolescents (12-17) is appropriate

Notwithstanding the greater responsibili ties and pri vileges (e.g., right to drive, marry, sign up for
military service) that arc bestowed on teenagers in our culture, the IWG proposa l would restrict
reach ing them with a TV or Internet ad for a frozen dinner or cookies . An advertiser would run afoul
of the IWG principles when it broadcasts such an ad to an ad ult-targeted audience (such as
gatekeepe rs) when adolescents make up just 20% of that aud ience. Consider, fo r example, that in
May 20 11 YouTube 's audi ence composition of 12- 17 year-olds was in the mid-teens, but in any
given month it could edge up to the 20% threshold or beyond. Med ia buys are based on average past
site performance - making it a challenge to comply, since actual demographics are not known
beforehand . Also, an advertiser interested in targeting young adults (twenty plus year a ids) cou ld
easily and inadvertently reac h a television aud ience comprised of 20% teen s as cab le networks such
as ABC Family, Adult Swim, and MTV are above the 20% threshold, and broader age reaching

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networks such as ESPN and Comedy Centra l are close ly approaching 20%. Clearly, a food
advert iser's media choices can be severely limited with a low threshold defin iti on for teen
adverti sing.

Product Packag ing

Food companies, big and small, rely on the product label as the primary means for communicating
with consumers. Beyond the mandatory information that inform s consumers about the food , the
often limited label space is the primary vehicle by which food companies can distinguish their
products from the competition. Packaging often carries iconi c bri ght colors and characters that are
associated with the brand. Strip products of their color and characters and they appear all the same on
shelf. Yet, it appears that this is what the JWG principles wou ld do. Under the proposed principles
the prese nce of an animated character on product packag ing is definitiv e proof that the product is
marketed to children . The proposed ban extends beyond licensed third-party characters to include a
company's own, often trademarked, characters, so that a company would be prohibited from
featuring its characters on packaging of products that don 't meet the IWG nutrition standards. This
would be true whether that product is intended to be marketed to ch ildren, to gatekeepers for their
children, or even to adults.

The ban aga inst animated characters is written such that that even "characters" like Santa Claus, the
Easter Bunny, and Halloween' s ghosts and goblins are off- limits unless the stringent and large ly
unobtainable criteria are met. Seasonal packaging of many food products would be eliminated, even
though the majority of seasonal food products are directed to adults and gatekeepers. Every time a
company considers adding a cute or whimsical character on packaging (seasona l or not) it would
have to ask itse lf, "Could thi s be appealing to child ren or viewed as appealing to children?" This
questi on will be asked even if youth are not the target. Wh il e we suspect that the Iwa does not
intend to ban the use of the Easter Bunny, the concern refl ects key problems of the proposal: overly
broad categories of conduct are covered and the cri teria employed does not distinguish child-focused
marketing from other com mun ications that mi ght include children.

Company Characters

The elimination of animated characters extends beyond packaging, because animated characters and
trademarked company characters are used in all types of ad verti sing and marketing efforts. For
example, Companies use costumed versions of thei r characters at all-fami ly and adult events. But if
the character is appealing to children as defined by the IWG, the company's marketing efforts would
be seen as reac hing children , regard less of actual intention. Simil arl y, a print ad using a company
character could, under the IWG, be viewed as directed to chi ldren, even when the media itself is not
ch ild-directed . Some company characters have been in existence for decades, with ge neration s of
adults hav ing grown up with them, and marketers use these characters to reach those adults.
Nevertheless, the IWG would have companies abandon them.

In- Store Activities

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Few in-store activities are directed to children or teenagers, as they do not make up the majority of
shoppers . Offers, discounts, and promotions are genera ll y directed to adu lts and gatekeepers. Yet, if
the product or eleme nts of a promotion may appeal to chi ldren, if the offer uses certain words ("Your
kids wi ll enjoy"), or otherwise depicts children , the in-store activity could be pro hibited unl ess the
food product qualified under IWO standards . Compani es market food products to parents for their
children, and the point of sa le is a conven ient place fo r thi s to occur. Most store visitors are adults
and the vast majority of purchasing deci sions are made by parents and caregivers, not children and
ado lescents. The IWG focus on in-store activities is mis-placed and wou ld restrict communications
that most would not view as targeting ch il dren or adolescents.

Event Marketing

The IWG considers sponsorship of a public event to be youth-targeted if one of several indicators is
met, including if 30% or more of the attendees are children (or 20% adole scents) or more
subjective ly - if the event invo lves child-oriented themes, acti vities, incenti ves, or features animated
characters. Under this definition, there are many events that a company or brand would now decline
to sponsor or participate in - even if they are actually famil y-oriented events and the target is not
children or teens. Participating in a health fair, fun run , community read ing or book festival could all
be called into question. These famil y events often have activities for children and demographics of
such events are usual ly not measured . The outcome under the IWG Proposal would mean fewer
sponsorships of positive community events, since very few food products would meet the IWG
standards. These communi ty events may be the very ones that support play and phys ical activity - a
necessary part of the solution to the childhood obesity problem.

"Company" sponsorship of an event would also be implicated, if the company's name is also a name
identified with its products and some of its products meet the IWO nutriti on standard s and others do
not. Companies often use their company name to sponsor philanthropic events or events that
advocate hea lthy lifestyles. Yet, a company wou ld not comply with the IWG principles if, for
example, 20% of attendees were teens (or 30% children) and the following acti vities were engaged
in: ad ult-targeted product information pamphlets, product sampling to adults of non-IWG qualifying
foods, company banners displayed, or if a company 's costumed character identifi ed with a non -I WO
qualifying food was present.

Philanthropy and In-Schoo l

Nestle USA is proud of its philanthropic and in-school activities. As a CFBA I member, Nestle USA
does not advertise branded products in pre-kindergarte n and elementary schools, but can and does
engage in public service activities and charitable donations to these schools. For example, in
conjuncti on with Reading is Fundamental , the company has donated thousands of books to
e lementary school s, including sets of books that address healthy lifestyle topics. These books and
their book cases carry a simple book plate that refers to Nestl e USA as the donor. Under the IWG
proposa l, Nestle could not identify itse lf in this manner. Similarl y, Nestle USA has partnered with
the National Education Assoc iation (N EA) - the nation ' s largest profess io nal educators' organization
- to expand nutrition and phys ical activity resources for teachers. The program, Healthy Steps for

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Healthy Lives, provides instructional activit ies that teach students about be ing healthy. Some of the
program material s bear Nestle's name in a "brought to you by" manner. Since only some Nestle
branded products qualify under the IWG ' s nutrition stringent standards, Nestle would no longer be
able to engage in this type of activity.

There are other examples of Nestle USA 's education and community related philanth ropi c activities,
li ke its Adopt-a-School program, donating foo d and employees volunteering at local homeless
shelters, etc. Depending on the demographics, the se efforts would no longer be allowed, unless all
mention of the food company is eliminated. This is particularly troublesome and unfair, since a bank,
in surance company, or just about any other company could identify itse lf. Again, thi s may not be
what the IWG intended, but it is an outcome of applying expenditure criteria to an attempt to regulate
business conduct.

Ill. Se lf-regul ation

Nestle appreciates the constructive role that the federal government, espec ially the FTC, has played
in spurring industry self-regul ati on and the FTC's strong support for such se lf-regulation. We
believe that industry self-regulation is working to improve the nutritional profile of food s advertised
to children, and we have co llaborated with the CFBAI to develop a transparent and reasonable
industry-wide nutriti on criteria program for products advertised to children under 12. Importantly,
the CFBAI 's definition s of what it means to market "to" ch ildren are balanced and workab le. We
also believe that a successful so lution to today's childhood obes ity issue mu st acknowledge the
important and primary role of parents and famil y in so lving the issue and society's need to make
ph ysica l activity a key component of the so luti on.

Nestle USA will continue to explore and deve lop products with health and we llness in mind,
and will continue to support se lf-regulation that views the food industry as playing a role in the
overall strategy of addressing childhood obesity.

Si nce rely,

Scott Remy I
Chief Communicati ons Officer

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